Student loan rate set to double Monday, no resolution in sight

Recent high school graduates working hard to make extra money for college might have to take on a few more hours.

On Monday July 1, the interest rate is set to double for government-backed student loans.

Seven million students are expected to take out new Stafford loans for the beginning of school this fall.

Jamie Sekerak is working at Swings and Things this summer, saving money to follow her dream to become a veterinarian technician.

When making her decision on where to go to college, Jamie says she focused on the programs offered.

"We weren't really looking at price right away, we were looking at more of the quality and how many people graduate from that school and how well they do," says Sekerak.

But like millions of other students her age, price does become a factor and one she still has to figure out.

On July 1, the interest rate for government-backed student loans will jump from 3.4 percent to 6.8 percent.

Congress' Joint Economic Committee estimates the increase will cost the average student $2,600.

Both Republicans and Democrats debated back and forth about extending the 3.4 rate for another year -- but no agreement was made and neither side could agree on a new plan.

All proposed plans would tie student loan rates to government market rates and they would be variable.

"It's kind of a scary thing because that means it can go up really really high at some point and so you have all these student loans kids have when they come out of college and it's going to be difficult to pay for them," says Tatiana Reidel, whose daughter will begin her freshman year at Ohio State in the fall.

Lawmakers say a deal is still possible after the 4th of July recess.

Every year, the average cost of graduating college goes up by about a thousand dollars. The cost of attending college has out paced inflation in recent years.